Music Publishers: "Pandora has gone to war against creators of music."

Today National Music Publishers Association President and CEO David Israelite aggressivley joined the debate over Pandora's effort to lower payments to songwriters and music publishers.

"Yesterday, Pandora CEO
Tim Westergren posted a blog on the Pandora website defending himself from the
avalanche of artist and songwriter complaints regarding Pandora’s efforts to
slash payments to the very creators that make Pandora possible. Mr. Westergren’s
post could not be more wrong or misleading.

Put simply, Pandora has
gone to war against creators of music. For years, they’ve funded a
well orchestrated campaign to lower the amount paid to songwriters and
artists. The facts speak for themselves.

- In 2009, Pandora
entered into a settlement agreement with SoundExchange for royalties paid to
artists, only to run to Congress a few years later arguing the rates it agreed
to were too high. Pandora asked Congress to undo the agreement and lower its royalty
rates.

- In November 2012,
Pandora sued ASCAP to further lower the already paltry rate (only 4% of
revenue) it pays to music publishers and songwriters.

- Pandora continues to
complain that music publishers and songwriters should not be able to negotiate
“free-market” rates and instead remain subject to consent decrees that keep
rates below market levels.

Meanwhile, Pandora uses
the artists’ and songwriters’ creative content to grow its business and pay its
executives millions of dollars. That NMPA, RIAA, ASCAP, BMI along with hundreds
of artists and songwriters have finally started to speak out is attributable
only to Pandora’s continued actions against our industry.

With respect to
songwriters, the low royalty rates Pandora pays are real. Per stream
numbers recently in the press were determined by reviewing royalty statements,
Pandora filings and other documents. None of this is referenced in
Westergren’s blog post.

Last year, NMPA held a
songwriter event at which we demonstrated how five hit-making, successful
songwriters were paid minimally for millions of plays on Pandora. In
the first three months of 2012, five of their hits – arguably the most popular
song written by each of them -- streamed 33 million times on Pandora. Yet
these songwriters received a combined total of $587.39 for those streams. Even
using data provided by Westergren’s “independent blogger”, songwriter and music
publisher interests received only $97 for one million streams of a
song. By any standard, this is unacceptable.

Westergren says that
through Pandora he sees, “a future that allows tens of thousands of working
musicians to finally reach the audiences they deserve.” But, due to low
royalties paid by online music giants like Pandora, songwriters and artists
can’t make a living despite reaching their audience.

While Pandora wages war
on creators, other digital music services are entering into voluntary
agreements with the music industry. I think we can all agree that digital music
services are an increasingly important and significant part of the music
industry. However, without the payment of fair royalty rates to
songwriters and artists, music services like Pandora will make it impossible
for them to make a sustainable living from their creative work. "